Large Corporations Cash in on Florida Environmental Fund

Janet Moore, 75, points toward the old Imperial Gas station site in Marion County. Moore's friend, who died five years ago, owned the property next to the site for 36 years but was never able to drink the well water. (Photo by M.C. Moewe.)

By M.C. Moewe
Florida Center for Investigative Reporting

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When Wilma Council’s parents bought a home in Marion County 38 years ago, they didn’t know the gas station across the street had already begun to poison their dreams.

“You could smell the contamination,” Council said of the water from her parents’ well.

In about 1966, petroleum from the old Imperial Gas station started leaking into the ground and aquifer, according to a state-commissioned study in 1987. Nearby residents were told not to drink the well water.

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Grandes empresas se benefician de fondo ambiental de la Florida

“They were an elderly couple; they had to move,” said Council, still trying to determine who is responsible for cleaning the contamination on the land she inherited. “Nothing is being done about it.”

The state created the Inland Protection Trust Fund in 1986 to respond to leaking petroleum storage tanks, such as this one, which threaten human health and the environment. The fund is financed largely from a tax on gas wholesalers, which pass on the cost — about $190 million a year — to Florida drivers through retail gas prices.

Council and her parents didn’t know the Inland Protection Trust Fund existed. State officials say the deadline has long passed for them to apply for state cleanup money, and the Imperial Gas site itself was not among the more than 17,000 that went through the qualification process.

Following the fund’s creation, the state offered amnesty programs to contaminated site owners to pay for the majority of the cleanup costs. But abandoned sites, such as Imperial Gas in Marion County, were not likely to get access to the funds because the agency tasked with handling the money made it a policy not to seek out abandoned properties. “The Department has always taken a stance of being a resource only,” said Robert Brown, bureau chief for the Florida Department of Environmental Protection’s Petroleum Cleanup Program. “We did not seek out facilities and property owners to get them qualified.”

While Council and her family didn’t benefit from the state fund, major corporations are benefitting in a big way from that pool of public money.

Large corporations now own hundreds of the contaminated properties eligible for state cleanup money, according to records analyzed by the Florida Center for Investigative Reporting. Since the program began 20 years ago, $64.8 million has been spent on 407 Circle K Stores properties, $63.9 million on 325 7-Eleven sites, and $46.9 million on 184 ExxonMobil Oil facilities.

The state only lists the current owner of the property, so whether those companies purchased the properties before or after the state paid to clean the contamination is unknown.

Over 20 percent of the $2.8 billion paid from the fund since 1990 has gone to mitigate environmental pollution at properties now owned by 20 companies, accounting for $624 million paid out for 2,716 properties, according to state records analyzed by FCIR.

Those 20 companies currently have 2,042 properties that are in the process of being cleaned or waiting for cleanup with the public funds, indicating Florida drivers could be paying millions more to clean up pollution for those companies.

“That’s just another example of corporate welfare that is not in the public interest,” said Linda Young, director of the Clean Water Network of Florida, a group that works to strengthen clean water laws in Florida. “These are successful corporations. Why is this not part of their cost of doing business?”

Ned Bowman, executive director of the Florida Petroleum Marketers and Convenience Store Association, said the fund is being used as intended. “It started so the marketers would turn themselves in and say, ‘Yes, we have a problem,’ ” Bowman said. “That money doesn’t go to those companies. That money goes to pay the contractors and the workers in the state of Florida to clean up these sites.”

Twenty years ago, a federal law required petroleum storage tank owners to purchase commercial insurance for contamination accidents. Most of the leaks covered by the trust fund happened before this requirement.

But in 1999, Florida lawmakers added a program tailor-made for companies whose properties have repeat spills. If a petroleum leak or spill happens on a property already approved, the trust fund will pay some cleanup costs for the new leak or spill. So far, nearly $2 million has been approved for that program, according to state records.

The Pantry Inc., headquartered in Cary, N.C., tops the list of companies that have taken advantage of Florida’s fund — with $91 million so far used to clean up polluted properties. The Pantry operates 1,655 convenience stores in 13 states under brands including Kangaroo Express and reported $27.4 million in net income for fiscal year 2010.

A Pantry spokesman declined to comment for this story, as did representatives of other companies that received Inland Protection Trust Fund money.

Companies such as The Pantry bought some of the Florida properties already contaminated and may not have made that purchase without the existence of the state fund, Bowman said. “They have as much right to use the fund as any other of our members,” Bowman said.

As cash-strapped Florida has struggled to the pay the bills, The Pantry’s profits have been bolstered thanks to the Inland Protection Trust Fund. “In Florida, remediation of such contamination reported before January 1, 1999 will be performed by the state (or state approved independent contractors) and substantially all of the remediation costs, less any applicable deductibles, will be paid by the state trust fund,” according a recent SEC filing by The Pantry.

“That’s got to be nice, to build a gas station, then spill gas and then get the government to fix it,” said Frank Williams, who owns a residential lot next to the old Imperial Gas site in Marion County.

Young, the Florida environmental advocate, said she believed that the state money was being used to clean up abandoned contaminated sites, not those owned by large companies. “You can drive to almost any town and you can see abandoned gas stations,” Young said. “There are properties that are never going to get purchased by a new, viable business.”

The old Imperial Gas site has been abandoned for as long as Williams can remember. He inherited the property from his grandmother five years ago. “She never was able to drink the water,” Williams said. “Nobody could drink it. You could smell it [contamination in the water] and you could tell it wasn’t fit for drinking.”

Imperial’s petroleum started leaking around 1966 and continued to soil the ground for the next 20 years, according to Florida Department of Environmental Protection records. “Residents have been required to use bottled water or other potable water sources,” according to a 1997 report on the site. “Somehow this site fell thru (sic) a crack and was never addressed.”

More recent tests on the one remaining well near the site show the well water is no longer contaminated, said James Martin, a spokesman with the Marion County Health Department.

State officials say what clean up remains to be done won’t be known until an assessment is done on the site. That step could cost $125,000 to $200,000, according to a state report.

Brown, the bureau chief for FDEP’s Petroleum Cleanup Program, said Imperial Gas’ owners did not apply for the amnesty programs that would have allowed state money to be used at the site. “It certainly could happen, if there was no property owner or nobody with the wherewithal to do this,” said Brown, adding that he does not know how many other sites like Imperial are in Florida.

Large companies operating in Florida, on the other hand, have streamlined the process necessary to tap the hundreds of millions in available cleanup money. Whether named Kangaroo, Lil Champ or Smoker’s Express, all of the Pantry’s 360 properties that have received funding show the same contact information, and several properties use the same cleanup contractor.

The complicated approval process is evident by the number of documents submitted before an approval. In 1985, a Handy Way Food Store in Lawtey, Fla., reported to the state that one of its three underground tanks had begun leaking, according to FDEP records. A professional site assessment report and follow-up questions from the state resulted in 67 documents being filed before funding was approved five years later. But it paid off. So far, the state has spent $1.5 million for that cleanup.

In contrast, the Imperial Gas site shows only four documents filed between 1984 and 1991, according to FDEP records. Nearly $300,000 for the Imperial Gas site was authorized in 2006, but records indicate the site has a large gas plume and clean up “at this site will be extremely difficult and expensive,” according to one state report.

The convoluted history of the Imperial Gas site has been difficult for state workers to sort out. “Since this site was being addressed by the State since as early as 1983, would it have been reasonable that the former owner did not think he needed to apply?” a state worker asked in the 1997 report.

On March 14, 1980, the owners of Imperial Gas, the Imperial Florida Oil Company, voted to sell all its assets to Cheker Oil Company, according to Marion County property records. In 1981, Cheker sold the property to an Ocala resident after granting him a two-year, $30,000 mortgage at 13 percent interest.

While Cheker’s mortgage loan was paid off in 1984, the owner stopped paying property taxes. Little happened with the property until 2006, when Marie Yolaine Giordani-Pierre, of Miami Gardens, purchased the property for $52,900 in back taxes.

After examining the Giordani-Pierre’s finances, the state has asked her to pay $34,576 to help clean up Imperial Gas’ mess, said Lisa Kelley, a spokeswoman with FDEP’s central district. “Typically we would look at the current owner of the facility,” Kelley explained. “Typically in purchases the people would have done their due diligence.”

The old Imperial Gas property remains undeveloped. In about 1966, petroleum storage tanks on the property began leaking and continued to soil the ground for the next 20 years, according to state records. (Photo by M.C. Moewe.)

Giordani-Pierre, who could not be reached for comment, told FDEP that her circumstances have changed and has agreed to pay $800 for a second financial evaluation. An extension was granted but with a warning.

“Failure to complete the ‘Financial Affidavit’ and submit it to the Department by February 15, 2012 will result in the initiation of an enforcement action by the Department,” according to a letter sent to Giordani-Pierre on Oct. 6.

FDEP plans to pay for any costs Giordani-Pierre cannot afford, Brown said. The site was found to be near a public well supply, which gave it imminent threat status and the state the discretion to pay for cleanup.

Should Giordani-Pierre’s financial situation improve, the state can try to recoup costs. “We do have an ability to go back for recovery if their financial circumstances change,” Brown said.

But the state will not likely pursue Imperial Gas, the company that allowed petroleum to leak onto the property in the first place.

“We don’t often allocate our resources in that manner,” Brown said.

Charts and map by Grant Smith for the Florida Center for Investigative Reporting. This story was funded in part by a grant from the Society of Environmental Journalists.

Where Has Inland Protection Trust Fund Money Been Spent?

The map shows the locations where Inland Protection Fund money has been spent since 1986 to clean up contamination, the name of the facility currently at the location, the name of the owner determined to be responsible for paying for cleanup, the contamination score (with a higher number indicating higher threat), and the amount of Inland Protection Trust Fund money spent as of Oct. 3. The current owner may not have been the site owner when Inland Protection Trust Fund money was paid out.

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6 Responses to “Large Corporations Cash in on Florida Environmental Fund”

  1. Randall Gunn says:

    The article fails to take into account how and when companies like Pantry and Circle K came into title/ownership of the contaminated properties. What the article and research did NOT consider and take into account is that the VAST majority of the stations/properties that are owned by Pantry and Circle K were part of the acquisition of chains of companies that operated the stations. Circle K and Pantry are companies that have purchased 100, 200 locations in a single transaction. 7 Eleven purchased the Mobil assets in Florida in 2010. Circle K purchased the Shell/Motiva assets in one package. There were almost 100 stores that were purchased at one time. 7-Eleven purchased close to 200 stores at one time.

    The releases occurred PROIR to the acquisition of the chains and assets. In most instances, the properties were ALREADY a part of a State Fund BEFORE the larger companies purchased the chains.

    The article fails to properly explain the data and leaves the impression that the larger companies had owned these locations fro a number of years and took advantage of a loop hole to get into the State funds. The accurate explanation is that the big companies acquired locations that were already contaminated but that the cost of PREVIOUS contamination was covered in a State fund that the PREVIOUS owner had applied to and been accepted into by the State.

  2. Bruce-Ocala says:

    I think the point was that taxpayers (ultimately) have been funding the clean-ups of very healthy corporations. A more astute reader, Randall, would have asked why taxpayers are paying for corporate neglect, perhaps malfeasance? Would you be okay with taxpayers picking up the tab for BP’s Gulf oil spill? Why is there no pursuit of financial remedies from the responsible parties, previous owners or their successors? Why isn’t some sort of lien placed on the property, or a surcharge assessed? Why isn’t there mandatory insurance or bonding required from dispensers of fuel? The answer would seem to be that Florida coddles corporations and demeans its citizens, when it isn’t exploiting its citizens for the benefit of the corporations.

  3. Randall Gunn says:

    Bruce-Ocala: You have a misunderstanding of the basic function and structure of the environmental remediation laws. The object of the laws are NOT to punish the responsible party. The object is to find someone, anyone, in the chain of title who can be forced/has a deep enough pocket that they can be forced to pay 100% of the remediation. It does NOT matter if the party charged by DEP to clean up the site EVER actually operated on the site or had ANYTHING to do with the actual spill or release. The ONLY thing that matters is if they are on the title. If they are on the title, they can be 100% liable. It is the responsibility of the party charged to go after others in the chain of title to get them to contribute their share of the responsibility.

    As an example, I know of a company who sent 2 barrel to a licensed waste storage site. They filed all of the paperwork. They did everything according to all laws and regulations. 2 barrels to a site that operated for 20 years. They got sued by EPA for spill costs for the ENTIRE site. They went through 10 years of litigation.

    This is the reality, smaller companies had a spill at the sites. The smaller companies reported to the State and were included in the State fund programs. A few years later, the big companies paid big money to the small companies for their businesses. The big companies paid the little companies more since there was a defined dollar amount/risk associated with the prior spills on the site by prior owners and operators. The small companies took the money and ran. If there had not been a big company to come in and buy the smaller chains, the work would not have been done. In addition, the small companies could have been so cash strapped that they would be put into the indigent program and then the State would have had to pay everything.

    The ONLY thing the big companies did was purchase a property with a defined exposure risk for remediation as oppossed to unlimited risk for something they did NOT do.

    If anyone is being coddled and getting away with anything, it is the small companies who actually OPERATED the properties AT THE TIME of the spill or release. They did something wrong. They cashed out when the big company came along. Without the defined risk, the big companies would not have purchased the property.

    Who actually caused the release or spill has NOTHING to do with who has to pay the cost to do the clean up.

  4. Carole says:

    The customer is always going to pick up the costs of anything a corporation does, that is how they get their money. I’m just glad to see all the sites that have been cleaned up.
    I remember some years ago, before the fund was set up, an owner of a small business purchased some land where a gas station had been and had a new building constructed for his business. Then he found out that he would have to pay $300,000 to have the tank removed and the landed cleaned. He committed suicide. How wonderful that we can all pay a little to have the pollution, that was created so that we could drive down the highway, has been corrected.

  5. Bruce-Ocala says:

    Randall, we seem to be missing each other. Your concern (and apparently Carole’s) is remediation while mine is with liability. If liability is not established, and parties made responsible, there is no incentive for close monitoring of tanks by fuel dispensers. Remediation fixes a problem; who pays for it – here taxpayers – is the assessment of liability, wrongly assessed in my view.

    Toward the end the article says: “But the state will not likely pursue Imperial Gas, the company that allowed petroleum to leak onto the property in the first place. ‘We don’t often allocate our resources in that manner,’ [DEP’s] Brown said.” Why not?

    Knowing this issue is widespread and long standing, have corrective actions been taken requiring any current fuel dispenser to maintain specific liability insurance or a performance bond? Or have those traditional private market approaches for assessing risk and compensating loss been negated by the taxpayers’ generous intervention with another helping of corporate welfare?

    As reported, many past incidents are decades old and recovery of the loss may be impossible from those who were direct parties to the problem. Remediation does require funding akin to the methodology described of collecting sums along the way. However, it seems that the only properties being addressed are those of current commercial value, often a larger corporation who knows that remediation costs can be covered by taxpayers. Unlike paying into a Superfund for clean-up which is not tied to the commercially profitable use of the land but directed to the worst sites, Florida’s plan does end up benefiting those with the deeper pockets.

    Sadly, folks like Giordani-Pierre in the article didn’t apparently get the property researched. The big gas-retail chains know how to work the angles and get the state to fund the recovery of good sites.

  6. Randall Gunn says:

    Bob: ALL of the environmental laws since the date they were promulgated have been designed to have someone pay the cost to remediate. The Federal, State, local laws and regulations are not designed to have the responsible person pay. ALL the State or Federal laws and agencies care about is having somebody pay the cost. There is only one place under the laws where determining who the responsible person for a release is even considered. That is when someone charged by EPA for the full cost of the release has to bring everyone into a court to determine how much the corporation EPA nailed can get reimbursed by the actual responsible parties.

    No manipulation by the big companies is going on.

    The environmentalist who promulgated the environmental laws (behind the lobbyist who worked over legislatures and congress)did not care about making the responsible party pay the cost. They just wanted it cleaned up and be able to send the bill to someone,anyone that they could claim had ever owned the property. Fault is irrelevant and that was the way the environmental activists wanted it. We all have to live with that because if someone seeks to say that there should be some fairness and the guilty parties bear responsibility, they will be crucified as the evil polluter trying to get around the laws of the good peaceful environmentalist.

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